The news: Mercado Libre, the Argentinian ecommerce empire, says it will invest billions of dollars into its Brazilian business in 2023. Much of that investment will go to Mercado Pago, its fintech business, which has been increasing its reach in financial services.
In 2022, Mercado Libre’s fintech operations, which include Mercado Pago, accounted for 44.9% of the company’s net revenues of $10.54 billion.
The background: Expansion throughout Latin America in banking and payments, which includes the rollout or growth of savings, investment, and consumer credit products, is core to the company’s strategy.
Mercado Libre operates in 18 countries, all of which are in Latin America, and it operates or has immediate plans to operate Mercado Pago in seven of them.
The paperwork: Latin American governments are finding ways to regulate the fintech industry, often by adapting laws that apply to traditional banking. Those actions have tempered Mercado Pago’s growth as it complies with each of the seven countries’ financial sector rules.
The big takeaway: Mercado Pago is on track to become Latin America’s financial super app, initially growing out of the ecommerce platform but gradually coming into its own as a distinct set of products and services. First, however, it must make it through the varied regulatory weeds of its prospective empire.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.